BestCare HMO Assets Current Assets: Cash $2,737 Net premiums receivable 821 Supp
ID: 2612520 • Letter: B
Question
BestCare HMO
Assets
Current Assets:
Cash $2,737
Net premiums receivable 821
Supplies 387
Total current assets $3,945
Net Property and equipment $5,924
Total Assets $9,869
Liabilities and Net Assets
Accounts payable-medical service $2,145
Accrued Expenses 929
Notes Payable 382
Total Current Liabilities $3,456
Long –term debt $4,295
Total liabilities $7,751
Net assets-unrestricted equity $2,118
Total Liabilities and Net Assets $9,869
4.5 Considering the balance sheet for BestCare HMO:
A. How does this balance sheet differ from the one presented in Exhibit 4.1 for Sunnyvale?
B. What is BestCare’s net working capital for 2011?
C. What is BestCare’s debt ratio? How does it compare with Sunnyvale’s debt ratio?
Explanation / Answer
Net working capital = current assets – current liabilities
= $3,945-$3,456
= $489
Debt ratio = Total debt÷Total assets
=($3,456+$4,295)÷$9,869
=0.79
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